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Active Income Portfolio

For those seeking a sustainable income strategy, with a difference.

About The Active Income Portfolio

About the Active Income Portfolio

Our philosophy at Market Matters has always been around active management, and our income portfolio stays true to label. Combining an active approach to income producing equities, ETFs and listed Income Securities such as Hybrids, the portfolio will satisfy those looking for sustainable income with significantly less volatility than the market.

Portfolio Performance
Portfolio 1M 3M 6M 1y 3y pa ITD pa*
ACTIVE INCOME (1.33%) 3.08% 2.74% 7.33% 9.58% 8.10%
RBA CASH RATE +4% 0.65% 2.05% 4.07% 8.08% 5.83% 5.17%
VALUE ADD (1.98%) +1.03% (1.33%) (0.75%) +3.75% +2.93%
* Inception date 05/07/2017
Portfolio Holdings trade now
COMPANY CODE STOCK NAME WEIGHT (%) RISK TIME HORIZON ENTRY DATE ENTRY PRICE ($) LAST PRICE ($) DIVIDENDS ($) DAILY CHANGE (%) GAIN / LOSS (%)
AGL AGL Ltd 4 Moderate Long 23/02/2023 7.50 8.34 0.43 0.85 16.93
ANZPI ANZ Capital Notes 6 6 Low Long 8/07/2021 100.33 103.10 12.38 0.00 15.10
APA APA Group 5 Moderate Medium 26/05/2023 9.82 8.41 0.56 1.45 -8.66
BHP BHP Group 8 Moderate Long 11/12/2019 40.38 44.27 13.52 1.35 43.12
CBA Commonwealth Bank 6 Moderate Medium 13/03/2020 61.33 120.34 21.05 0.28 130.54
CBAPG Commonwealth Bank Hybrid 5 Low Medium 09/04/2018 100 102.40 33.46 0.01 35.86
CNI Centuria Capital Group 4 Moderate Medium 29/07/2022 2.065 1.75 0.17 0.00 -7.02
DXS Dexus Property Group 4 Moderate Medium 13/12/2022 8.02 7.91 0.52 1.80 5.11
GSBG25 Aust. Govt. Bond 3.25% 21.04.2025 6 Low Long 11/05/2022 100.54 100.92 3.79 0.05 4.15
MTS Metcash 5 Moderate Medium 9/12/2020 3.5 3.91 0.88 0.00 36.86
NAB National Australia Bank 7 Moderate Medium 15/12/2022 29.64 34.64 2.39 -0.14 24.93
NABPF National Bank Hybrid 5 Low Long 21/03/2019 100 104.75 27.61 0.14 32.36
NABPI NAB Capital Notes 6 5 Low Long 13/07/2022 98.94 103.68 11.77 0.55 16.69
NHC New Hope Coal 4 High Medium 22/11/2022 5.55 4.65 0.80 4.26 -1.80
ORA Orora 4 Moderate Medium 16/11/2023 2.56 2.72 0.05 1.87 8.20
OZBD BetaShares Australian Composite Bond ETF 5 Low Long 13/04/2022 45.28 44.64 2.51 0.31 4.13
TLS Telstra Group 5 Low Medium 9/06/2021 3.43 3.86 0.80 2.12 35.86
WBCPK Westpac Hybrid 5 Low Long 7/09/2022 100.40 102.31 11.65 0.11 13.51
Portfolio cash position: 7%
Recent Sales trade now
Company code STOCK NAME WEIGHT(%) RISK TIME HORIZON EXIT DATE ENTRY PRICE ($) CLOSE PRICE ($) DIVIDENDS ($) GAIN / LOSS (%)
MFG Magellan Financial Group 4 High Medium 08/01/2024 8.73 9.09 0.93 14.78
WES Wesfarmers Ltd 4 Moderate Long 16/11/2023 47.85 53.94 4.16 21.42
GEM G8 Education 3 Moderate Medium 22/08/2023 1.29 1.08 0.06 -11.63
PPT Perpetual 4 Moderate Medium 27/06/2023 24.7 25.4 2.83
MXT MCP Master Income Trust 5 Low Long 15/06/2023 2 1.91 0.49 20
AGL AGL Energy 1 Moderate Medium 21/04/2023 6.95 8.59 23.6
TLS Telstra Corp Ltd 2 Moderate Medium 21/04/2023 3.43 4.27 0.3 33.24
WES Wesfarmers Ltd 2 Moderate Medium 21/04/2023 47.85 52.01 2.69 14.32
SGP Stockland 4 Moderate Medium 08/02/2023 4.18 4.01 0.26 0.22
PDL Pendal Group 4 Moderate Medium 12/01/2023 4.2 3.61 1.67 25.71
BHP BHP Group 2 Moderate Long 08/12/2022 38.56 46.42 10.16 46.73
AGL AGL Energy 3 Moderate Medium 08/12/2022 6.83 8.07 18.15
APA APA Group 4 Moderate Medium 08/12/2022 9.75 11.03 13.12
SSM Service Stream 4 High Medium 22/11/2022 1.565 0.745 0.05 -49.2
BOQ Bank of QLD 6 Moderate Medium 17/08/2022 8.7 7.37 0.31 -11.72
APA APA Group 4 Low Medium 10/08/2022 8.59 12.14 0.53 47.5
CWNHB Crown Resorts Hybrid 4 Moderate Medium 29/07/2022 98.26 102.75 3.02 7.64
IFL Inisgnia Financial 5 Moderate Medium 13/07/2022 3.59 2.73 0.4 -12.81
MFG Magellan Financial Group 3 Moderate Medium 13/07/2022 33.85 12.15 1.57 -59.47
SIQ Smart Group 5 Moderate Medium 13/07/2022 6.98 6.62 1.43 15.19
WDS Woodside 1.45 High Medium 15/06/2022 29.76 32.54 2.3 17.05
IGL IVE Group Ltd 3 Moderate Medium 11/05/2022 2.28 1.8 0.66 7.89
AGL AGL Energy 3 Moderate Long 03/05/2022 5.35 8.38 0.16 59.63
NSR National Storage REIT 4 Moderate Medium 13/04/2022 2.04 2.65 0.09 34.31
XARO ActiveX Ardea Real Outcome Bon 5 Low Long 13/04/2022 26.47 25.28 1.6 1.55
AWC Alumina Ltd 4 Moderate Medium 24/02/2022 2.2 1.95 -11.36
DXS Dexus/AU 4 Low Long 25/11/2021 9.2 11.27 0.23 25
IAG Insurance Australia Group Ltd 6 Moderate Medium 11/11/2021 4.69 4.47 0.13 -1.92
NAB National Australia Bank Ltd 6 Moderate Long 4/11/2021 18.71 28.7 1.35 60.61
CBA Commonwealth Bank of Australia 1 Moderate Medium 29/09/2021 61.33 102.63 6.05 77.21
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Recent Opinion for the Income Portfolio

APA Group (APA) $8.34

APA is the largest owner of natural gas transmission in Australia, contracting with energy retailers to provide transmission from gas production fields to major cities. Macquarie posted a good note on the regulated utility yesterday morning, upgrading the stock from neutral to outperform and increasing its price target by 60c to $9.40, implying ~12% upside in the share price along with a ~7% yield.

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First Up

As the market slips into the Easter long weekend, some profit-taking felt evident on Tuesday, no great surprise considering the index has rallied over 15% from its November low. The afternoon selling wasn’t overly aggressive, but as we touched on yesterday morning, the markets are a touch bullish and long; hence, some book-squaring/selling by the weak longs didn’t encounter any significant resistance. One of the main themes of 2024 to date has been the strong getting stronger and often the weak getting weaker, even as the ASX200 forged to fresh all-time highs. A quick glance at some sectors three months into the year tells the tale: remember, the index is up a healthy +2.5%.

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Interest Rates / Bond Yields

Australian 3-years edged lower last week, taking more of its lead from the FOMC than the strong local employment data. However, a cursory glance at their chart shows they’ve been in a holding pattern through 2024, trading midway between 3% and 4%. Our preferred scenario is that we will see a test of the former over the coming months.

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Centuria Capital Group (CNI) $1.80

We have discussed CNI a number of times over the last year as the position weighed on portfolio performance. Fortunately, we held our nerve, but prudent portfolio management precluded us from increasing our positions. However, we will review our position if/when we see another ~10% on the upside, although its yield is particularly attractive for our Income Portfolio.

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Dexus Group (DXS) $7.66

Dexus is Australia’s largest office landlord, and while there is significant conjecture around the future of office, we believe this uncertainty is more than captured in the price. They delivered a solid, ‘less bad’ than expected,  result in February, although the stock hasn’t yet embraced the numbers. Guidance for the full year was unchanged despite the stronger 1H, with a flagged FY24 dividend of 48 cps, which puts DXS on a yield of ~6.2%.

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New Hope Corp (NHC) $4.60

The Coal producer reported a big decline in 1H24 earnings yesterday, which was to be expected given the significant pullback in Coal prices over the past year, and they think Thermal Coal, used in power generation, will stay around these sorts of levels ($US120-130/tonne) on average over the longer term, but with plenty of price spikes along the way. The world is rightly moving towards net zero, and coal, specifically the stuff used to generate power, has a finite life span.

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Interest Rates / Bond Yields

Australian 10-years edged higher last week following the robust US economic data, but they appear comfortable around 4%, where they’ve spent most of 2024. Over the last 18-months, the 4% area has been the average yield for the 10s, with 1% swings either side. Our preferred scenario moving forward is another foray on the downside, which would unfold if the RBA gets inflation firmly under control.

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National Australia Bank (NAB) $33.50

NAB fell 2.8% on Thursday, better than Westpac & ANZ's 3.8% decline but still enough to have a meaningful impact on the index, accounting for 10-points of the ASX200’s decline.

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Commonwealth Bank (CBA) $116.22

CBA is often referred to as the most expensive bank in the world, but ever since it floated at $5.40 in 1991, the company has yet to do anything to warrant losing this tag. It is definitely not cheap, but when we combine a fully franked yield of almost 4% with the stability of Australia’s largest bank, it's hard to imagine aggressive selling following Macquarie’s note, especially considering the tax ramifications for many with the stock around its all-time high.

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Telstra Group Ltd (TLS) $3.78

Telstra’s 1H24 result was a slight miss, while FY24 guidance was updated towards the lower end of prior guidance. Hence, the stock has drifted lower over recent weeks. Also, TLS is regarded as a defensive stock, and as markets post fresh all-time highs, we are currently in a more “risk-on” environment which doesn’t help the telcos' relative performance. However, the dividend was lifted to 9c, putting the stock on a yield close to 5%.

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History of Actions for the Income Portfolio

CBA
UPDATED 27/03/2024 09:39
MM likes both CBA and S32 through 2024
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APA
UPDATED 27/03/2024 09:37
MM remains long and bullish APA for income
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OZBD
UPDATED 25/03/2024 09:00
MM remains bearish towards bond yields in the medium-term
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OZBD
UPDATED 25/03/2024 08:56
MM remains bearish toward Australian bond yields in the medium-term
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DXS
UPDATED 21/03/2024 13:59
MM continues to like DXS as an Income stock through 2024
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CNI
UPDATED 21/03/2024 13:56
MM is long and bullish toward CNI short term
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OZBD
UPDATED 20/03/2024 12:16
MM remains bearish towards Australian bond yields medium-term
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NHC
UPDATED 20/03/2024 12:14
MM remains bullish and long NHC ~$4.60
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OZBD
UPDATED 18/03/2024 13:31
MM remains bearish toward Australian bond yields in the medium-term
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CBA
UPDATED 15/03/2024 09:34
MM remains long and bullish CBA
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